Who Goes to For-Profit Colleges?

We know one particularly disturbing fact: For-profit colleges and universities educate 12% of the postsecondary population, but have huge attrition rates and account for account for half of the federal-loan defaults, measured in dollars. That ratio suggests that the for-profits are only interested in enrolling students—any students—but don’t particularly care if those students graduate, get well-paying jobs and are thus able to pay back their student loans.

But I want to go a step farther and ask, “Who exactly attends for-profit colleges”? More skeptically, I wonder what kind of prospective student the for-profits are targeting by way of their extensive recruiting machines. The results, it turns out, are though-provoking.

The Institute for Higher Education Policy issued a press release on June 14 bearing the headline “More Low-Income Students Begin at For-Profits.” The key statistic that they relate: “low-income students—between the ages of 18 and 26 and whose total household income is near or below the poverty level—are more likely to be overrepresented at for-profit institutions and are underrepresented at public and private four-year institutions.” Moreover, these representation ratios are part of a trend. From “2000 to 2008, the percentage of low-income students enrolling in for-profits increased from 13 percent to 19 percent, while the percentage enrolling in public four-year institutions declined from 20 percent to 15 percent.”

To my mind this can only mean one of two things. Either the for-profits are (as they always claim) reaching out to a socioeconomic ally disadvantaged demographic and helping them step up into the middle class or—from a far more cynical perspective—the for-profits are swindling poor (and thus uninformed students), promising them careers that they are in no way capable of actually experiencing, taking advantage of the fact that, as first-generation college students, they are unaware that there is a complex hierarchy in American post-secondary education. They target prospective students who don’t know that there is a vast difference between a degree from DeVry and a degree from Harvard, and who are totally unfamiliar with the culture of higher education. The for-profits prey on their ignorance and make them pay (or in almost all cases) borrow dearly for that ignorance. Based on the GAO’s recent report on scandalous recruiting practices I’m inclined to take the latter perspective.

Let’s turn to another significant chunk of the for-profit student demographic: veterans and their families. The best place to find a detailed account of the disproportionate percentage of military personnel enrolled in for-profit institutions is a report from Tom Harkin’s committee on Health, Education, Labor and Pensions released on December 8, 2010, entitled, “Benefiting Whom? For-Profit Education Companies and the Growth of Military Educational Benefits.” This story begins with the Post 9/11 GI Bill, largely authored by four senators, Jim Webb (D-VA), Chuck Hagel (R-NE), John Warner (R-VA), and Frank Lautenburg (D-NJ), all staunch supporters of veterans’ rights. They wanted to craft a bill that would give veterans of the Iraq and Afghanistan wars something like the educational benefits bestowed upon veterans of WW II and the Korean Conflict.

It was a well-intentioned piece of legislation, but it gave for-profits an opportunity to take advantage of a relatively obscure loophole. No one can receive more than 90 percent of his or her financial aid from the federal government (Pell grants, guaranteed loans, etc.). Military personnel, though, are exempt from this rule. That’s only fair, given their service to the country, but it has made them easy targets for the for-profit higher-education industry. Experts at navigating the financial-aid maze, for-profits have capitalized on the fact that ex-military personnel are exceptions.

The result, according to Senator Harkin’s report, is that “between 2006 and 2010, combined VA and DoD (Department of Defense) benefits received by 20 for-profit education companies increased from $66.6 million. . . to a projected $521.2 million. . . an increase of 683 percent.” The report concludes that “Congress may have unintentionally subjected this new generation of veterans to the worst excesses or the for-profit industry: manipulative and misleading marketing campaigns, educational programs far more expensive than comparable public or non-profit programs, and a lack of needed services.”

I think it’s obvious what my leanings are here. Seeing the economically underprivileged and military veterans so disproportionately represented at for-profit colleges only confirms the hierarchy I’ve alluded to above. At the other end of the spectrum are “the chosen” (to use Jerome Karabell’s phrase)—those wealthy enough and privileged enough to attend America’s most selective universities. All the more proof that our country’s higher education system is not a single entity—far from it.